Work on an overhaul of China’s bankruptcy law could begin soon, a member of China’s top legislative body has revealed.
China’s legislature will begin setting up the team responsible for drafting amendments to the existing law in June, Zhong Zhenzhen, Deputy Director of the Legislative Affairs Office of the National People’s Congress (NPC) Financial Economic Committee, said at a press conference Thursday.
It’s the first sign that the NPC is taking substantial steps to change the existing Enterprise Bankruptcy Law, which was enacted in 2007. The existing law has been criticized for not doing enough to promote the use of the bankruptcy mechanism, a problem that has grown more urgent as China’s 2020 deadline for tackling its horde of unprofitable “zombie” state-owned companies moves closer.
The amendments will “revolve around the requirements of supply-side structural reforms and improving the business environment,” Zhong said. Legislators will need to research and examine issues including “bankruptcy conditions and procedures,” as well as related concepts like personal bankruptcy, Zhong added.